Business Strategies are defined as the plans that are developed for the working of a firm in accomplishing the vision, objectives and the performance of the business model of the organization (Scarborough 2016). The vision and the plans that are essential for the strategies for the business of the firm are there in the three models of competitive strategies namely differentiation, cost and leadership. The business strategies of the firms are long-term action oriented plans that are designed and measured to achieve a specific target of the organization and also to make sure that the ways and methods in which the business of the firm is to be analysed are said. The strategy is primarily the plan of the management to make sure that the organization has the business goals and the desired measures for the same (Zaefarian, Henneberg and Naudé 2013). In the following report, the business strategies of Alibaba is measures along with the industry analysis of the same. The description of the industry along with the plans and programmes for the recommendations and suggestions for the improvement of the same to the ceo and the Business Head is being mentioned in the report. The following paragraphs highlight the swot analysis of Alipay, the sister concern of Alibaba along with the porter analysis, vrio analysis and the pestle analysis for the same company in relation to the various factors related to the same company.
Alibaba is one of the premium Chinese multinational company that deals in E-commerce, retail, internet and B2B marketplace (Drucker 2013). The name of the company came from Alibaba from the Arabian literature One Thousand and One Nights due to the universal appeal served by the company. The company was founded by the Chinese nationals Jack Ma and Peng lei in the year 1999 in the province of Hangzhou at Zhejiang in China. The company is a global company that serves the people from all over the world on a global platform dealing in the sales related to the products of E-commerce, online auction hosting, money transfer and the mobile commerce company (Du 2013). The service provided by the company is one of the major online shopping portals that has a stupendous growth in the revenue and share market rates per annum.
The company was termed as the World’s most admired company by Fortune as the initial public offering of the company at the time of creation was 25 billion which one of the best in the world is. The company has more than 65,000 employees working under the realm providing all the types of sales to the global platform including business to business sales, business to customer sales and customer to customer sales (Libert, Wind and Fenley 2014). At present, the company is defined as the World’s largest retailer with the ninth highest global value in the world with one of the largest venture capitals in the world. The growth percent of the company is higher than the all-time higher growth of Amazon and has achieved triple digit growth yearly percentage in public cloud revenue growth (Hu and Zhao 2012).
Definition of Industry
Industry in the literal sense is defined as the economic activity that is concerned with the process of raw materials and the manufacturing of finished goods in the realm of the factories. The industry is the place where the manufacturing of the goods is being done for the sake of selling and which makes sure that each of the industry has its own range of goods that is being sold in the industrial complex of the same manner (Oberholzer-Gee and Wulf 2012). The industry serves to make one of the best instances of industry and should be able to accomplish the following characteristics features –
Alibaba as a business industry works as a mediator between the consumer and the buyer in the online portal that helps to venture into the marketplace for the industry. The company through the extensive network of websites facilities in the procurement and the sales of goods between the two parties at both the levels. The site is a fee-free site where the website as well as its subsidiaries operate more than 80% of the Chinese E-commerce business (Havinga, Hoving and Swagemakers 2016). The company earns by taking a commission from each of the transaction that is being done in the stores of the website and sells ads in place of charging which makes it one of the best platforms for the new and start-ups to launch their products and sell it to their customers. The working of Alibaba is similar to Google making it one of the best
The working of Alibaba is one of the most customer friendly as well as seller friendly as it is one of the foremost places that has maintained a no fee zone for the customers as well as the clients (Tan 2015). The working of Alibaba makes sure that both the customers and the sellers are not directly debted to the process of payment of fees and money to the company for the running. Instead the ad and the commission process of the company makes sure that the payment of the money for the company is running and the sellers and the purchasers are not under pressure for the working of the same (Alibaba.com 2018).
PORTER analysis is one of the major ways to analyse a company and make sure that the company is in a better competitive advantage when compared to the other sectors of the industry in the times. The PORTER five forces of analysis for Alibaba is as follows –
Competitive Rivalry – One of the strongest forces for any company is the competitive rivalry that can make a company have diverse strategic decisions for the brand. Alibaba being one of the most popular E-commerce websites faces a huge amount of competitive rivalry from the websites from both within and outside the provision of China (????? 2016). The major competitors of Alibaba are Amazon and eBay which have their own respective set of market and consumers.
Threat of New Entrants – The threat of new entrants for Alibaba is comparatively low as the condition of setting up a new company in China is not favourable. Moreover, the amount of money and effort that the company needs to establish a new set of companies is high which most of the new entrants cannot bear (Cockayne 2016). The existing companies of the times are also not favourable for the new companies as the operational cost for the new companies is high. This makes this aspect favourable for Alibaba.
Bargaining power of Suppliers – The customer base of Alibaba is huge which makes it a potential market for the suppliers to supply and sell their products. The bargaining power of the suppliers is therefore low as the suppliers do not bargain much with the company in terms of money as their sales are high which automatically makes them earn more profit in the longer period. Therefore, the intentions of the consumer to increase their rates of market in Alibaba is therefore not that high.
Bargaining power of Buyers – The bargaining power of buyers in Alibaba is medium as the buyers are the ultimate destination for any business which is providing product or services to the customers. The reputation of the brand and the price that the website offers in relation to the other websites of the same genre gives ample amount of buyers to the website and also make sure that the influence of the market over the buyers is comparatively low in the sense.
Threat of Substitutes – The threat of substitutes for Alibaba is very high as there are a number of websites and physical stores that can make sure that the customers are diverted towards them. Moreover, the wholesale market of China or any other stores are also influenced by the low price strategy can also influence the stores of Alibaba and give the company a tough competition.
PESTLE analysis is defined as the tools for analysis aimed at the strategic business planning to understand the external and internal effects of the business in the modern world. The PESTLE analysis stands for the Political, Economic, and Social, Technological, Legal and the Environmental analysis of the firm as well as the base country. The PESTLE analysis for China, the host country for Alibaba and the organization is as follows –
Political – The political factors that are there for the company of Alibaba in the global sense in the decrease in the level of EBITA margins which affect the core competency of the company in the global basis. The company with the effecting Chinese political scenario is wholly dependent on the Chinese economy for the working of the brand which makes the company have certain basic problems in the sense (Cockayne 2016). The company is politically affected by the push from the Chinese government in terms of the Artificial Intelligence and digitalisation.
Economic – In the economic sense, the impact of macro-economic factors is there on the business of the company in terms of the Chinese market share (McFarlan, Knoop and Lane 2012). The factors like the position of the company in terms of the monetary places and the government plans for the economic growth are totally dependent on the company in the longer run.
Social – The growing population of the Chinese markets provide the company with better target audience that helps the company to grow (Hu et al. 2014). The company has an effective Corporate Social Responsibility that helps the company to grow and cope up with the Chinese population and the society of the times.
Technological – The technological aspects of the company is the inclination towards the Artificial Intelligence that the company has and the big data that the company employs (Micklethwait and Dimond 2017). There are certain technical advancements in the core operations of the company that helps the employees of the company to work under favourable circumstances.
Legal – The legal factors that the company determines is the lawsuit that the company performs against the business operated by the counterfeits of the case. The legal aspects of the company is binding and helps the company to make sure that the legal obligations of the company are tight and mandatory to the places (Palepu et al. 2014).
Environmental – The Company has also certain environmental responsibilities that the company does in terms of the water conservation. In addition, due to their operations in China, the company tries to minimise the environmental pollution level as much as possible with their responsibility and the amount of modern amenities used.
There are a number of strategies that are being followed by the company in terms of the following sectors namely –
Effective marketing should be done by the company for the effective selling and the customer satisfaction of the company in the longer period of time. The 4 P’s of marketing is there in the firm for the effective marketing mix of the products and the system that the company is going through. Alibaba should get involved in better marketing mix of the products that the company is advocating and so better strategies are to be developed (Djavanshir et al. 2017). The major strategy suggestion of the company is to look for the products and the people who can make the working of the company better and can earn them decent amount of profits in the longer run.
One of the major strategies of the company is to find information regarding the foreign markets and the customer base that can help the company to expand their business and also to make sure that the company has enough information available to make the customers happy with their varied products and services (Yang et al. 2016). This reduces the time of the company in indulging in trial and error methods for the company in providing better service to the customers. Promotional tools like the use of Public Relations and media advertisements are to be used to make sure that their product and services have high amount of awareness in both online and offline sense.
The company should be open to include as many products in the list as required to make sure that the diversity of products for the satisfaction of the customers are to be the topmost priority in the sector. The company should include more products in the list to make sure that the products in the website are effective for all the sects of the customer (Jia et al. 2018). With the increase in variety for the customers in choosing their products, the website can be useful for most of the customers who are interested to buy their products for their various purposes. The product strategy is useful for the better usage of the products and make sure that each of the customers can get their products which make it a one-stop destination for all the goods.
The distribution of the products at Alibaba is one of the major instances that are useful in the better bartering of the products (Yazdanifard and Li 2014). Distribution process is essential to make sure that each of the products is well-distributed or supplied to the required places and also to make sure that the team which is there to maintain the same is also working at their best level (Liu 2015). The distribution strategy of Alibaba is to make sure that each of the products or the line of products is distributed at all major levels so that the supply power of the company is better. The authorities should make sure to implement great means at achieving hassle free and better supply strategies to make the distribution part effective.
The pricing strategy is one of the most effective strategies that are being implemented in the process of Alibaba. Pricing has always been a positive aspect of the company and so the customers who are there as the pricing strategist are there to make sure that the company gives maximum pricing benefits. The team of people handing the same should have an effective bargaining power that is to be done to make sure that the buyer gets the best deals in the market compared to the other websites and physical stores available in the market (Rosenbloom 2012). The pricing strategy is therefore definitely one of the major strategies that are to be implemented to make sure that the website has better pricing strategies than most of the other physical stores and the market places available in the other competitive markets to have their customer base strong and worthy.
The other suggestions that can be implemented by Alibaba in conquering the market is the better marketing and advertising strategies that are to be followed to make sure that each of the customer in the market are given proper requirements in the marketing place of the world. The customer base of the market should be analysed and given prime importance. A customer complaint team is to be hired to make sure that each of the customers are given proper solutions in the course of time (Erisman 2017). Proper supply chain and logistics supply is to be followed to make sure that market is being followed up and the products are delivered within the required span of time. The customer base of Alibaba is therefore of major importance which can make the whole customer base of the website have the desired results and benefits from the same. The business strategy of the website is to make sure that they retain their position as the market topper and also to make sure that their customer base keeps on increasing and no market fluctuation affect their profit (Anwar 2017). The authorities of the organization are to be given prime ways in controlling the company revenues and company revenues and costs are to be controlled by proper auditing and charts on a monthly basis.
Conclusion
In conclusion, it can be said that the market policies of Alibaba is one of the major which can make the company and help the company in attaining heights of success within a short span of time. The company has their customer base and product base that caters to most of the people from all over the world on a global basis and so the company implements a number of strategies and plans to make sure that each of the aspects of the improvement in the company has its own level of benefit and improvement. The report has highlighted the Porters five forces of analysis for the company along with the PESTLE for the same. Both the factors have helped to make the background for the development of the company and has mentioned the places that needed maximum improvement in the sector. Along the lines of improvement in the company, recommendations and suggestions are developed to make sure that the company reaches the goals for their targets and also makes sure that the company has its own level of customer base and product for the majority of the customers. The company can be seen in the light of major marketing strategies that help the authorities to make use of the situation in the correct manner.
Reference
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